You are asked to demonstrate your recently acquired Financial skills in a business context.
This case pertains to Ultra-Low Sulphur Diesel Transportation (ULSD), or transportation diesel.
You were recently hired by Beyond Emissions Burgers
(BEB), the current IPO darling of Wall Street on NASDAQ.
BEB’s mission statement is definitely not about greenwashing and very specific in their target
market:
BEB’s management team is highly experienced from a
venture capital standpoint.
BEB hired you as a recent MBA graduate reporting to
the CFO.
The CFO is a great leader and understands very well that she needs your skills in helping enroll other Executives as they move towards managing growth in a financially sound manner.
They hired you based on your MBA designation with the following expectations that you:
Demonstrate a well-rounded knowledge base.
Have solids skills in business communication and critical thinking that goes beyond business common sense which they already have.
Effectively draw from your Finance knowledge to educate members
of the Board’s Risk Management Committee. BEB practices decision quality.
Your first assignment from the CFO is to write a business document for the Risk Committee pertaining to concepts that are related to risk-managing their exposure to the cost of diesel. With the wild ride in diesel prices as a result of events in 2022, the Board is concerned about the cost of transportation from their warehouses in New York and their nationwide locations.
Use of APIs for Enterprise-ready skill in working efficiently:
Data wrangling and parsing. You must use tidy data with long and wide data frames.
Quality presentation skills with effective choice of visualization in communication - after all, the ability to tell a story and enroll leaders is what they expect from an MBA.
Foundational risk management skills.
Clean, clear and concise rendering of a business document. You
may refer to the rmarkdown, quarto resources or any other online
document to customize your output. I reserve the right to award a
maximum of 50% for any document that is not worthy of a
proper business communication. For clarity, the metric I use is simple:
if I feel I could not press the forward button in Outlook it’s short on
quality. This is not a technical rendering of what you did to your
Professor - I can read code in your .Rmd document if I need
to but I don’t expect to see it in a business document. Some
characteristics of a properly presented document:
Each question should be answered as if you were presenting to
BEB’s management team.
“Learn to learn” is a core objective of higher education: Using new packages and functions as you see fit to achieve your desired outcome.
Whilst there are many packages to format tables the following are suggested:
Use the following data from 2022-01-01 to
2022-12-31 inclusive:
EIA: New
York Harbor Ultra-Low Sulfur No 2 Diesel Spot Price, Daily. You may
refer to the bootcamp appendix on APIs after you have
registered and obtained your own API key. The RTL packages
provide functions to access the API once you have your API key.December 2022 CME NY Harbor ULSD futures contract
form Morningstar Commodities for futures contracts using
RTL::getPrices() and your credentials. This is covered in
the Data Wrangling in Tidyverse module of the course.You will need to merge the two resulting dataframes. To join, or the
equivalent of a VLOOKUP in Excel, you can use
dplyr::left_join():
?dplyr::left_joinx and the right
dataframe is y and we join them by the variable
date.x <- dplyr::tibble(date = as.Date("2022-01-01"), a = 10)
y <- dplyr::tibble(date = as.Date("2022-01-01"), b = 20)
x %>% dplyr::left_join(y, by = c("date"))
## # A tibble: 1 × 3
## date a b
## <date> <dbl> <dbl>
## 1 2022-01-01 10 20
Rmarkdown or quarto, render into a
clean and concise html document.firstNameLastName.Rmd and send it to
pcote@ualberta.ca before the deadline.Grading module and any
late submission will be assigned a grade of 0% - no questions
asked.All the Board understands is that BEB is purchasing
diesel directly from a wholesaler for its truck fleet at whatever price
is offered on that day. You, however, know that you can use other
instruments to manage the price risk. You will be using the specific
spot and futures contracts detailed in the data section for this
memo.
Explain in a paragraph or two:
BEB’s
operations.With the above information nicely presented, tell the story of what
the Committee key takeaways should be on what happened in 2022.
BEB is purchasing spot and could potentially hedge with
futures contracts.
| series | risk |
|---|---|
| HO22Z | 7.68% |
| Spot | 18.53% |